Globalisation

Changing employment patterns
1. Clark Fisher Model
2. Pre-industrial stage
  1. Most people employed in primary industries
3. Industrial stage
  1. New factories and industries develop which provide jobs
  2. Chemical and vehicle industries develop
  3. Secondary industries dominate the economy
  4. Tertiary sector begins to grow
4. Post-industrial stage
  1. Tertiary sector grows to provide services for increasing population
  2. Tertiary sector employment becomes more important than the secondary sector
5. After post-industrial stage
  1. Employment in quaternary sector begins to grow
  2. Quaternary sector - based on research, IT and communications
Employment sectors
1. LICs (Ethiopia)
  1. Primary sector 75% - mostly subsistence farmers, long hours and hard work
  2. Secondary sector - very small
  3. Tertiary sector 15%
2. MICs (China)
  1. Primary sector - largest but less dominant than in LICs
  2. Secondary sector - medium, but dominates economy
  3. Tertiary sector - large, with long working hours but good conditions and wages
3. HICs (UK)
  1. Primary sector - very small, mechanisation means fewer workers
  2. Secondary sector - small due to automation and relocation
  3. Tertiary sector - dominates due to a large variety of employment
  4. Quaternary sector - growing
  5. Good working conditions and wages in all sectors
Impacts of globalisation
1. Developed world e.g. Leeds
  1. Positives
    1. Wages have improved
    2. Everyone benefits from global goods/services
    3. Good working conditions
    4. More flexibility/choice in working times/location
    5. Higher prices can be charged for goods and services
  2. Negatives
    1. Some jobs are lost as companies outsource
2. Developing world e.g. Vietnam
  1. Positives
    1. Produce/services can be provided to more people
    2. Those who own land/resources benefit
  2. Negatives
    1. Informal sector continues
    2. The cost of products/services from the developed world is high
    3. Lower prices for their products than the developed world
    4. Low wages/exploitation of workers
3. Worldwide
  1. Increase in women working
  2. Better working conditions
  3. Goods available everywhere
  4. More skills
4. Institutions
  1. World Trade Organisation (WTO) - aims to encourage global trade and reduce import duties
  2. International Monetary Fund (IMF) - aims to provide the financial stability required for trade
International trade and capital flows
1. What has happened?
  1. International trade has grown massively
    1. 2010 - 48 times larger than in 1970
  2. Growth of TNCs, companies which expand into and invest in countries all over the world
  3. Banking, insurance and finance companies have also become globalised, meaning they can offer services all over the world
2. Why has this happened?
  1. Transport
    1. Container ships & air transport make trade faster and cheaper
  2. Communication
    1. IT has made it easier for countries to communicate
  3. International Monetary Fund (IMF)
    1. Made it easier for state-led investment in many countries
  4. TNCs
    1. Increased trade between countries
  5. Trade agreements
    1. Agreements between countries (e.g. EU) make trade between these countries easier
3. Foreign Direct Investment (FDI)
  1. The investment which flows from one country to another (often by TNCs)
  2. Can involve buying a business/factory in the country or by expanding an existing business
  3. Mostly done to take advantage of cheaper labour or resources
TNCs: Secondary sector (e.g. Nike)
1. Headquarters usually in a HIC
2. Why TNCs operate globally
  1. Reduce labour/land costs
  2. To sell inside trade barriers
  3. To be close to markets
  4. Large workforce
3. TNCs in developing countries
  1. Advantages
    1. Local people able to earn higher/regular wages
    2. Can bring new skills
    3. Bring investment, e.g. in new factories or call centres
    4. TNCs pay taxes which boost the local economy
  2. Disadvantages
    1. Low pay for workers
    2. Training only in low-level skills
    3. Long shifts and poor working conditions/abuse
    4. Factories can cause pollution
TNCs: Tertiary sector (e.g. BT)
1. BT Case study
  1. Outsourcing
    1. English speaking foreign nationals take over services like call centres
    2. Software development skills in India enable BT to develop
    3. Locations with administrative skills manage services like company accounting
  2. Why Bangalore attracted investment
    1. English speaking Universities provide science and technology graduates
    2. It has attracted software development companies, creating India's own 'Silicon valley'
    3. It offers reduced taxes
    4. Companies don't have to pay as much as they would in the UK
2. How tertiary TNCs differ from secondary TNCs
  1. Often administration companies, with call centres relocated to cheaper locations
  2. Often chain retail outlets located across the world
  3. Working conditions often better than those in the secondary sector
3. The new economy
  1. Based on the sale of services
  2. Most HICs have moved to it
  3. They are 'footloose' - they can locate anywhere

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